Synthesis and application of reliable nanoscale materials is a progressive domain and the limelight of modern nanotechnology. Conventional physicochemical approaches for the synthesis of metal nanoparticles have become obsolete owing to costly and hazardous materials. There is a need to explore alternative, cost-effective and eco-friendly strategies for fabrication of nanoparticle (NPs). Green synthesis of noble metal nanoparticles has emerged as a promising approach in the last decade. Elucidation of the molecular mechanism is highly essential in the biological synthesis of noble metal nanoparticles (NPs) for the controlled size, shape, and monodispersity. Moreover, mechanistic insights will help to scale up the facile synthesis protocols and will enable biotransformation of toxic heavy metals hence also providing the detoxification effects. Therefore, the current review article has primarily targeted the mechanisms involved in the green synthesis of metal NPs, which have been reported during the last few years. Detailed mechanistic pathways have highlighted nitrate reductase as a principle reducing agent in the bacterial mediated synthesis and stabilization of NPs. Furthermore, we have highlighted the potential implications of these mechanisms in bioremediation and biomineralization processes, which can play a critical role in biogeochemical cycling and environmental impacts of heavy metals. We anticipate that this review article will help researchers to address the challenges of bioremediation and modern nanotechnology.